Industry Outlook

US Furniture Insights

Smith Leonard presents the results of
January, February 2013

By Smith Leonard

“We continue to believe
that the residential
furniture industry will
benefit from the improved
housing situation. New
construction will take a bit
longer tosee the results, as
the homes have to be built
and then sold before any
furniture will be bought…”

The February results of our
recent survey of residential furniture
manufacturers and distributors
were pretty much in line with our
expectations. New orders were off 3
percent from February a year ago while shipments
fell 2 percent. Year-to-date for the two months, new
orders were up 2 percent and shipments were up
4 percent.

With the dollar value of orders exceeding shipments
for the month, backlogs increased 5 percent, but
dropped 1 percent from a year ago.

Receivable levels seemed pretty much in line for both
the monthly and prior year comparisons. Inventories
appear a bit high, but have moved a bit in the right
direction. Inventories built up last fall when we all
thought business was continuing to improve, but
then business softened after inventories were built.

The increase in the number of factory and
warehouse employees seems in line with increased
business. Payrolls are up 3 percent year-to-date
but we think part of that relates to some raises that
were given last year after, in many cases, no raises
in some time.

Housing continues to improve. Although shortages
have occurred in existing homes in certain areas,
causing growth to be slowed, the overall picture
continues to improve.

We continue to believe that the residential furniture
industry will benefit from the improved housing
situation. New construction will take a bit longer to
see the results, as the homes have to be built and
then sold before any furniture will be bought, but
we believe existing home sales will help the industry
until the new homes can have some more effect.

We had pretty much heard in conversations prior to
Market that business was “somewhat all over the
place.” When we described it as maybe like a kids
roller coaster, most tended to agree. While some
were outside the norm, it just seemed that business
was good one day, soft the next, maybe non-existent
one day, then good again the next. The key has been
trying to string together a good week or two.
So as we rode into the High Point Market, our
expectations were a bit low. We know all exhibitors
are excited with new product when they come to
town, but too many times when it is all over, the
excitement goes away.

Well, certainly not this Market. At least not in
the circles we covered. We haven’t seen this
much enthusiasm in quite some time, even
late in the Market. We talked to quite a few
exhibitors on Monday and Tuesday and all
were extremely pleased.

We know that many do not write a lot of orders at
Market, but some we talked to do write. We heard
phrases on Monday and Tuesday like “Best Market
in 5 years” and “Best Market since 2006 and 2007.”
We even heard one say “Best Market ever,” though
we imagine he had forgotten or didn’t know what
really good markets used to be like.

Let’s keep our fingers crossed that this momentum
carries forward. We know that many dealers wanted
to freshen their floors. Hopefully as the housing
sales demand more furniture, the new product will
entice even more sales.

The original report
appears in full in the
monthly newsletter
– Furniture Insights,
which is supplied by
Smith Leonard PLCC.
It tracks key data; and
annually produces key
operating statistics
and analysis for
manufacturers and
distributors.

Smith Leonard
PLCC are active
members of the
American Home
Furnishings Alliance
and work with
the National
Home Furnishings
Association, Southern
Home Furnishings
Association, the
Furniture Manufacturers
Credit Association,
Piedmont Triad
Partnership Furniture
Council, Women in the
Home Industry Today,
and the High Point
Market Authority.

News

Advertise

Who We Are

FFE is Asia's number 1 furniture export-import magazine. It has a regular circulation of 25,000 copies in PRINT sent by post to trade professionals around the world - Asia Pacific (52%)), Middle East (21%), Europe (13%) and rest of the world (14%). Each issue of the magazine is also available in web and eBook formats. Both the web and eBook editions are available for free access, 365 days, 24 x 7.